There was a time when someone could build a self-storage facility and watch it grow without much effort. Rent-up would be swift, income would rise, expenses would level out and, in 24 months, you could refinance your construction loan and make a nice return. There were no websites, no advanced marketing techniques, and Facebook was still a dorm-room project at Harvard.
Self-storage facility offices were the size of your first apartment, had no furniture, and if there was coffee, it was brought down from the facility manager’s apartment, not brewed in a nice, single-serve Keurig Machine. Competition studies were easy because there were only three competitors in a five-mile radius, instead of 13 in a three-mile radius. Security was scarce, driveways were gravel, and automatic gates were a luxury. You may be reading this, scratching your head, thinking, “I don’t remember it ever being like this.” Well, like the time of the dinosaur’s and the British Empire, this era has long since passed.
Now that we’re well into the 21st century and part of the Google’s online world, what do we need to know about our self-storage competition? Let’s focus on these specific facets: identifying your competition, management, amenities, curb appeal and pricing.
Identify Your Competitors
Do you know how many facilities you compete against in your market? How far does your facility market share reach? Start by identifying your competitors. Use Google, the Yellow Pages or an online self-storage directory site obtain a list of the facilities in your area. Second, map them out. The easiest way to do this is to purchase mapping software. Two popular programs are Microsoft Map Point and Google Earth Pro. These allow you to “push pin” or identify on a map where each of your competitors are located.
Once you have all the facilities in your area mapped out, use the measurement functions in the software to create a radius around your facility. If you’re in Manhattan, N.Y., your market area will be blocks. If you’re in a more rural area, it may be five to 10 miles. Most self-storage market areas settle between three and five miles.
You can accomplish this on a standard map if it makes you feel more comfortable, but I suggest the mapping software so you can manipulate the data in the future. Once you have this information, you can identify your competition.
Get to Know the Managers
Now that you know who your competitors are, it’s time to make a few visits. First, the most important part of any self-storage operation is the management. If a facility has great managers, it can overcome a poor location, low budget, etc., and vice versa—poor management can destroy the best facility in a market.
Walk into the facility and inquire about renting a unit. How did the managers treat you? Are they pleasant? Do they have a sense of humor? Were they in the office or did they come out of their onsite apartment? Try to be as objective as possible. Did they offer to show you a unit or give you a price and show you the exit? Did they give you gate and office hours, pricing, specials, a walk through, etc. Did they explain what makes their facility the best? Would you feel comfortable storing your most prized possessions there?